Issues & Trends – December 2011
Domestic tourism sentiment hits a low as student and business travel prop up inbound spending
SENTIMENT about the performance of the domestic tourism sector is at its lowest point in three years, according to the latest Tourism and Transport Forum-MasterCard Tourism Industry Sentiment Survey.
TTF chief executive John Lee said operators are wary after a tough year but “if there’s a brighter spot, it’s that tourism operators are slightly less pessimistic about domestic travel for the upcoming holiday period”.
But he cautioned even those expectations are well below average.
“Continuing global economic upheaval, natural disasters at home and in two of our top inbound markets, and the number of Australians travelling overseas have contributed to the current malaise, especially for leisure tourism operators in regional areas,” he said.
“More than 40 per cent of operators expect international tourism to be worse than usual over the Christmas-New Year period, with only six per cent expecting improved conditions.
“Expectations for domestic tourism are more positive, with 15 per cent forecasting improved conditions, against 30 per cent suggesting domestic trade will be worse than usual for the period.
“In other words, tourism operators are not getting their hopes up too high – but they are hoping for better weather than we had for Christmas and January last year, especially in Queensland.”
Lee said the dollar remains a key, albeit lessening, concern.
While 57 per cent of respondents rated the strong Australian dollar among the top three factors negatively impacting their businesses, that was down from 72 per cent last quarter.
“The survey also shows labour and skills issues continuing to gain prominence, with 88 per cent of operators nominating the skilled labour shortage and two thirds nominating a shortage of unskilled labour as being medium or high impediments to their businesses,” said Lee.
Meanwhile business and education visitors have kept international tourism spending in the black, defying the gloomy global economic conditions, according to a TTF assessment of the latest International Visitor Survey (IVS).
The survey shows leisure visitors fell one per cent, with spending down three per cent for the year ending September 2011, with business arrivals up seven per cent and spending up 26 per cent.
Education spending was $6.6 billion for the year, accounting for 36 per cent of total expenditure by international visitors.
Lee said China is the shining light, contri-buting $3.4 billion for the year, up 14 per cent.
He said education visitors account for around 60 per cent of that expenditure, while family and friends visiting international students are another significant market.
“We are also seeing double digit rises in spending by visitors from Singapore, India, Indonesia and Thailand, with a significant proportion of that also relating to education,” he said.
“Considering the economic turmoil which has hit much of the world over recent months and the strength of the Australian dollar, the fall in leisure visitors and spending could have been much worse, and today’s result is testament to the efforts of Tourism Australia in keeping Australia at the top of international travel wish lists,” he said.
But he underlined the need for new and refreshed tourism product.
“If we are to reach the Tourism Industry Potential target of doubling overnight tourism expenditure to $140 billion by 2020, we need between 40,000 and 70,000 additional rooms across Australia, but at current rates of investment we will fall short,” he said.
“We need to provide new and refreshed tourism products and experiences … and we are urging the federal government to take action to address the challenges confronting the tourism industry.